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HUD to Bring Back Stronger Discrimination Rules

HUD wants to restore a 2013 rule that focused on “disparate impact,” which is an analysis of a practice’s outcome even if the practice itself isn’t discriminatory.

WASHINGTON – Calling it the “the latest step HUD is taking to fulfill its duty to ensure more fair and equitable housing,” Marcia Fudge, Secretary of the U.S. Department of Housing and Urban Development (HUD), announced that a rule on “disparate impact” would be changed, following publication in the Federal Register as “a notice of proposed rulemaking.” Once published, a 60-day comment period will follow.

Disparate impact is a type of discrimination prohibited under the Fair Housing Act, but identifying that discrimination requires a look at overall results to a group of people who are protected under the Act. Individual behaviors that create broad disparate-impact discrimination are not, by themselves, necessarily discriminatory. HUD refers to it as the “systemic racism” component of fair housing.

The proposed rule would rescind a 2020 update that eased some of the nation’s disparate-impact rules and restore original rules created in 2013. HUD calls the 2013 rule more consistent with decades of case law, and says it would work better to fix remedial problems and “eradicate unnecessary discriminatory practices from the housing market.”

“We must acknowledge that discrimination in housing continues today, and that individuals, including people of color and those with disabilities, continue to be denied equal access to rental housing and homeownership,” says Fudge in HUD’s media release. “It is a new day at HUD and our department is working to lift barriers to housing and promote diverse, inclusive communities across the country.”

According to HUD, disparate impact has been used to challenge policies that unnecessarily exclude people from housing opportunities, including zoning requirements, lending and property insurance policies, and criminal records policies.

Under the 2013 rule that HUD plans to restore, officials say the discriminatory effects framework was fairly straightforward: a policy that had a discriminatory effect on a protected class was unlawful if it did not serve a substantial, legitimate, nondiscriminatory interest, or if a less discriminatory alternative could also serve that interest. In the announcement, HUD says that the 2020 rule added “new pleading requirements, new proof requirements and new defenses, all of which made it harder to establish that a policy violates the Fair Housing Act.”

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